Tesla’s second quarter to hinge on China sales

The California-based electric carmaker, led by billionaire entrepreneur Elon Musk, is riding on China’s sales to make up the lost sales accounted in Europe in the second quarter.

Tesla, the US based electric automaker that has long been America’s investor sweetheart – despite niche sales and earnings – has stepped up the game lately, with increased ambitions of becoming a true global competitor to the established, traditional carmakers. It started to expand in Europe and just recently, in the last quarter, also decided to tap into the world’s largest single auto market – China.

Now, according to Barclays’ analyst Brian Johnson, the reported second-quarter sales should see China compensate for dwindling demand in Europe, while the US deliveries remain pretty much the same. That means the company is going to reach its proposed 7,500 sales target, with the analyst saying in a research note the goal would be met most likely on China registrations.

Initial data “demonstrate the increased importance that China will need to play in meeting Model S guidance for 2014 to compensate for apparently plateauing demand in Europe and North America,” Johnson said. “A solid debut in China appears to have compensated for a softening in Europe.”

Musk, 43, has signaled from the start the importance of China, as he traveled to the country back in April, when Tesla started first client deliveries of its only model, the Model S luxury sedan – stretching as far as forecasting the world’s largest auto market would come to match the volume in sales accounted in the US by the start of 2015.